The Future of Online Advertising Spending

As the Internet revolution continues to take the world by storm, the advertising industry continues to change as a result.  Market analysts predict that spending on online advertising in the US will reach $50 billion by the year 2015. 

Display:

Online ad spending grew 20 percent last year thanks to a sharp increase in display advertising.  According to a recent article on paidcontent.org, display advertising is the fastest growing segment of the Internet ad market showing 16.4 percent growth last year.  Paid search advertising is also growing rapidly at an average of 14.4 percent per year.

Video:

Videos in general are having a profound impact on the shape of the Internet. According to another recent article found on mashable.com, spending on video ads reached $1.42 billion last year.  David Hallerman (eMarketer’s principal analyst) attributes this growth to the fact that, “video generates greater audience attention than any of the other digital ad formats.”  As the world’s networks continue to expand and connection speeds improve, we will continue to see and increase in video advertising.

Mobile:

Another segment of the Internet market that is rapidly growing and driving the growth of online marketing is the mobile market.  The proliferation of smart phones and tablets is changing the world, as we know it.  JP Morgan analyst Doug Anmuth said in a paidcontent.org article that mobile will be the single biggest factor accelerating web growth in the coming years.  The mobile ad market is expected to double this year and is on pace to top $1.2 billion.

In the past, the small amount real estate on phone screens and mobile connection speeds presented obstacles and limited the capabilities of advertisers.  However, in the future, we can look forward to faster mobile data delivery from next-generation networks that will increase connection speeds ten times over by the year 2015.  The online advertising industry will also benefit from the growing popularity of smart phone and tablet devices.  The increase in screen size and functionality of these new devices ultimately means infinitely more possibilities for advertisers.

The Digital Landscape for Advertisers

While television still dominates as the most effective mass-market format, the digital landscape for advertisers is growing very rapidly.   According to Kantar Media intelligence, the digital media’s share of the world ad market has more than doubled since 2006.  In 2006, digital media represented just 8 percent of the market. In seemingly no time, digital media advertising now represents over 17% of the total world advertising market.

One of the main problems with the Internet and the mindset of on-demand programming is that the viewer/potential consumer is trained to skip over annoying ads.  This is why a lot of banner and pop-up style advertisements have become nearly obsolete.  The target audience must be engaged in a manner that is conducive to the message being welcomed by the consumers.  The Internet’s explosive growth has led to a demand for creative advertising on the Web.  Advertisements must fully exploit the strengths of the Internet medium and extend the audience engagement in ways that TV can’t.

The new target audience is beginning to go to the Internet for on demand programming.  As companies like Netflix and YouTube continue to grow, they continue to captivate massive audiences while advertisements are creatively woven through the content featured on these sites.   Whether it’s a music video or an interactive game, corporations of all shapes and sizes are competing to make meaningful impressions on new consumers.  After all, advertising is any time a sponsor pays to deliver a message through a medium.  The possibilities for branding and activation are endless.        

The following is a link to an interesting article that addresses the future of digital media:

http://whyy.org/cms/radiotimes/2011/03/07/mergers-in-the-news-media-landscape/

 

Legal issues behind the NBA lockout

The current CBA (Collective Bargaining Agreement) between the owners and the players
of the NBA is set to expire on June 30, 2011. Just like football, if a resolution is not reached during this off season the next season will be at risk of being shortened or canceled. We have all seen how the NFL lockout has played out when the negotiations broke down and the litigation begun. It has been a very messy situation and the parties involved with the NBA will avoid following in those footsteps if they know what’s good for them.


There are several issues that have led to the current dispute between the NBA players and the owners. The most significant issue has been that many NBA owners claim they are in the red and that the league as a whole is losing money. Owners want to increase their portion of basketball related income. The players currently get 57% and the owners get 43%. The implementation of a hard salary cap as opposed to the current soft salary cap is also a big issue. The owners are also looking to cut player salaries by about one third and shorten the length of contracts while eliminating exceptions like signing bonuses or deferred compensation. NBA Commissioner, David Stern, has recently proposed a “flex cap” which would allow richer teams to exceed the target of $62 million per team but this proposal has been opposed by the players and legal analysts have been skeptical that anything other that a hard salary cap would be effective.


Hopefully the two sides can agree soon because 2 major professional sports lockouts in one year could have a devastating impact on an already struggling economy.

Image Sources:
 http://www.thesportsbank.net/nba/nba-lockout-in-2011-heres-your-league-labor-issue-synopsis/
http://theoptionquarterback.wordpress.com/2011/06/15/nba-a-lockout-is-needed/ 

The Pac-12 New Media Rights Deal

The Pac-10 conference is now the Pac-12 and they have just signed a 12-year media rights deal with ESPN and FOX. The deal will reportedly net the conference around $3 billion with $21 million a year going to each program. The two networks will share game coverage and take turns broadcasting the conference championship game.

The Pac-12 conference also announced the establishment of a new company called Pac-12 Media Enterprises and a new Pac-12 Network dedicated to the distribution of content on all platforms and devices. This landmark deal is the largest ever in collegiate athletics. The deal marks the first time that the Pac-12’s institutions would share equally in the revenues generated by the new deal.

The following articles and videos give further details on the deal:





http://www.cubuffs.com/ViewArticle.dbml?DB_LANG=ES_ES&DB_OEM_ID=600&atclid=205146778

http://sports.espn.go.com/ncf/news/story?id=6471380

Cracking Down on Dirty Agents

There has been a long time debate on whether or not athletes at the college level should be financially compensated for their participation in sports. These sports generate millions for the schools that they play for. Many think that the athletes should be compensated because they are essentially the lifeblood of the sports that they play and millions are made off of their talent and hard work. Others feel that a free education is enough. The current NCAA rule prohibits players from receiving any “extra benefits” but whenever there is a scandal it seems as if the players suffer the majority of the consequences. Where is the justice for the other parties involved? If a coach is involved, he may be fired or fined but we have seen start over with another program.

According to the following articles, a new legislation will soon change all that. The newly passed Texas legislation is cracking down on dirty sports agents with punishments of jail time. Check em out.


http://sports.espn.go.com/ncaa/news/story?id=6558943&campaign=rss&source=ESPNHeadlines

http://www.washingtonpost.com/sports/texas-lawmakers-approve-crackdown-on-unethical-sports-agents/2011/05/18/AFSnik6G_story.html

Sports Contract Disputes

Joe Flacco contract controversy.

Joe Flacco is coming off a career year in which he became the Baltimore Ravens’ all-time leading passer but the Season ended on a bad note (see video) and the Baltimore Ravens have publicly stated that Flacco will not receive a contract extension this year.

 

Flacco was the Raven’s 1st round draft pick in 2008 and is still has two years remaining on his rookie contract. He has surpassed all of the expectations and truly out performed his contract. However, Flacco remains frustrated that talks on a new contract have not begun; mainly because the NFL lockout has had prohibited contact between the teams and their players during this offseason. Flacco became even more disgruntled when Quarterback coach Jim Zorn was fired earlier this year. "I'm kind of taking it personal," Flacco said. "You're saying that you're not happy with the position. I'm not sure if there is any truth to that, but that's the vibe you're sending to your quarterback. I feel like I'm being attacked."

But it only gets worse for Flacco who is thought to be worried that his new deal is not even a priority for the team. The Ravens recently selected QB Tyrod Taylor in the NFL draft and it is expected that when the lockout ends the Ravens will be scrambling to re-sign players with less than two years left on their contracts. Also, All-Pro defensive tackle Haloti Ngata is due a contract extension before Flacco and is considered by many to be a higher priority. I’d love to see how this one plays out.

http://articles.baltimoresun.com/2011-04-26/sports/bal-sportsblitz-ravens-flacco0426_1_joe-flacco-ravens-quarterback-nfl-lockout


Albert Pujols Contract Negotiation.


It has been reported that Albert Pujols is seeking a 10-year, $300 million contract extension. This would be the largest contract in MLB history. Yes, even larger that the infamous 10-year, $275 million contract that Alex Rodriguez received in 2008. Albert still has one year left on his current contract. However, after this season he is set to become a free agent. Albert has been adamant about not negotiating during the season so as not to be a distraction to the team. And now that the new season is under way all signs indicate that the negotiations between Pujols and the Cardinals have indeed ceased. The Cardinals are still considered the front runner to re-sign Pujols since the Yankees and the Red Sox will not be participating in the Albert Pujols sweepstakes, But only time will tell…


Sources:


http://sports.espn.go.com/mlb/hotstove10/columns/story?columnist=stark_jayson&id=6056760


http://sportsillustrated.cnn.com/2011/writers/jon_heyman/05/04/albert.pujols/

Trademark Controversy in Sports

For years the Spanish speaking community has been pronouncing the Los Angeles baseball team The Dodgers as “Los Doyers.” The mispronunciation turned nickname has gained massive popularity and found its way on to many hats, bandannas and t-shirts in the Los Angeles area.

Products carrying the Los Doyers emblem have been sold exclusively by local street venders and merchandisers until, in August of 2010, the Los Angeles Dodgers, LLC filed two applications for trademark of the mark Los Doyers. The Dodgers subsequently began sending out cease and desist letters to retailers of the merchandise who had been enjoying healthy profits form the sale of Los Doyers merchandise.

View more videos at: http://nbclosangeles.com.

Another similar situation resulted from the rise in popularity of the New Orleans Saints. When the Saints won the NFL’s Super Bowl in 2010, the phrase became even more popular and a controversy arose over who had the rights to ‘Who Dat’.

The phrase came from a chant – “Who dat say they gon beat the Saints” – and has been a mainstay at the Superdome since the 1980’s. Two brothers and longtime Saints fans claim they own the only federal trademark of the phrase and are also the owners of WhoDat Inc. Many credit the 1983 song titled Who Dat with creation of the popular name but its use has been traced back to the minstrel shows of the 1930's.

Despite the fan backlash and the unknown origins of the phrase, the NFL has implemented an aggressive cease and desist campaign claiming they own the rights to the trademark.




Related Blog posts:

LAList
http://laist.com/2010/09/09/dodgers_make_a_play_for_los_doyers.php

LA times blog:
http://latimesblogs.latimes.com/dodgers/2010/09/there-may-be-money-to-be-made-on-los-doyers-but-theyre-still-a-mediocre-team.html